The digital transformation of traditional business process and the assets that run them have become one of the raves of the moment. A Forbes-backed research highlights just how popular the topic of digital transformation and the tools needed to accomplish it has become. Statistics like the fact that 55% of business intended to adopt digitization strategies in 2018 which grew to 91% in 2019 highlights just how popular this transformation has become.
The reason for its increased adoption rate is the ease it brings to managing business operations, facilitating growth, and a healthy return on investments made on digital transformation. The numbers from the 2019 digital business survey prove these benefits outlined earlier to be true. 35% of organizations have experienced revenue growth while 67% believe it has helped them deliver better services to customers. But despite its popularity, the adoption of digital transformation brings up a multitude of question many enterprises still struggle to answer. This post will answer some of the more important questions with special emphasis on facility management and efficiency.
What is Digital Transformation?
Digital transformation refers to the integration of digital technologies into business operations to change how an enterprise operates and delivers value to its customers or clients. Digital technologies generally refer to devices and tools that enable access to the internet thus its use allows organizations to bring operational processes to cyberspace.
The above definition is a simpler version of what digital transformation is about but because digital transformation looks different for every company and industrial niche, other definitions exist. In terms of enhancing equipment and facility efficiency levels, the definition by the Agile Elephant better encapsulates its meaning. Here, digital transformation is defined as digital practices that ‘involve a change in leadership thinking, the encouragement of innovation and new business models, incorporating digitization of assets, and increased use of technology to improve an organizations entire operations.’
In facility management, assets refer to the equipment, tools, and operation stations within the facility while new business models and innovation refer to the integration of digital technology concepts. These concepts can be the digital twin, discrete event simulation or predictive analysis.
What is Overall Equipment and Facility Efficiency?
Productivity within manufacturing facilities and warehouses are generally measured using the overall equipment effectiveness (OEE) concept. This concept measures the maximum output machines can achieve and compares subsequent output to the optimized value. In cases where the machine or equipment falls short, the OEE falls from 100% and the production cycle may be termed unproductive.
The OEE is calculated using three separate components within facilities and these are:
- Availability – This focuses on the percentage of scheduled time an operation is available to function.
- Performance – This refers to the speed at which work centers compared to the actual speed it was designed to achieve
- Quality – This refers to the number of goods produced and the quality levels compared to optimal production qualities.
Although the OEE process is quite popular and has proved to be efficient, a critical analysis shows that it does not take into consideration some important metrics. OEE calculations do not include the state of the shop floor, material handling processes, and connections to both upstream and downstream performances. This is why its effectiveness as a measuring tool has been lampooned by a plethora of manufacturers with skin in the game.
Criticism of OEE as a performance measurement tool include its lack of ability to breakdown or access granular information in facilities and its lack of multi-dimensionality. The fact that it struggles with identifying real areas that require improvement within facilities is also a deterrent to its efficiency in analyzing factory performances. And this is where digital transformation comes into play.
Digital Transformation and its Ability to Enhance Facility Efficiency
The ability to digitize assets within manufacturing shop floors have created an environment where granular data can be collected from the deepest parts of today’s facilities. With the data collected due to digital transformation, a clearer picture of how a facility function can be gotten. But the digitization of traditional manufacturing processes and operations have also been a source of debate for diverse professionals due to certain difficulties. These difficulties include assessing data from legacy or dumb assets, managing communications across diverse supply chains, and bringing captured data together to make sense of complex facility operations.
To manage these challenges, diverse emerging technologies have been built around each of them. In terms of capturing data from legacy assets, the use of smart edge technologies that can be attached to assets is currently eliminating this challenge. While standards and communication protocols such as those from the OPC foundation is solving the issue of communication across both smart and dumb assets. Finally, to make sense from the captured data in order to enhance shop floor activities, digital twin technology provides a streamlined approach to monitoring and managing facilities using captured data.
With these emerging technologies, detailed insight at the granular level can be assessed about a particular facility. More importantly, these technologies attached to digital transformation can be used to enhance operational processes by delivering real-time scheduling, analyzing complex processes, and simulating applicable solutions to manufacturing shortcomings.
Discrete Event Simulation and Enhancing Facility Efficiency
Discrete event simulation (DES) tools such as Simio are some of the emerging technologies that play important roles in transforming traditional factory or facility processes. The introduction of DES can help with mapping out previous event schedules to create optimized scheduling templates that can speed up production processes.
DES tools or software can analyze both minor processes that are subsets of a large one, as well as, the entire complex system to produce schedules that optimize these processes. An example of this was the integration of Simio by Diamond-Head Associates, a steel tubing manufacturing company. The challenges the steel tubing manufacturer faced involved meeting production schedules due to a very complex production process with hundreds of production variables.
With the aid of Simio simulation software and the digital transformation it brings, Diamond-Head associates were able to utilize the large data sets produced by the varying production processes. With this simulation model, optimized schedules built for its manufacturing processes were created and this helped with making real-time businesses decisions. The steel tubing manufacturer successfully reduced the time it took to make a decision from an hour and a half to approximately 10 minutes.
This case study highlights how digital transformation can be used to enhance facility efficiency in diverse ways. These ways include optimizing scheduling procedures and drastically reducing the time needed to come up with accurate solutions to complex manufacturing-related scheduling processes.
Enhancing Facility Productivity with the Digital Twin
Another aspect of digital transformation is the use of digital twin technologies to develop digital representations of physical objects and processes. It is important to note that the digital twin does more than a 3D scanner which simply recreates physical objects into digital models. With the digital twin, complex systems can be represented in digital form including the capture of data produced by assets within the system.
The digital twin ecosystem can also be used to conduct simulations that drive machine and facility performance, real-time scheduling, and predictive analytical processes. Thus highlighting how digital transformation provides a basis for receiving business insights that change the leadership of an organization thinks and make decisions.
An example that highlights the application of digital twin technology to enhance productivity or facility efficiency is that of CKE Holdings Inc. CKE Holdings is the parent company of restaurants such as Hardee’s and Carl’s Jr. Earlier this year, the enterprise was interested in providing efficient shop floors or restaurant spaces for its employees to increase productivity levels, train new employees, and deliver better services to its customers. To achieve its aims, the organization turned to the digital twin and augmented reality to aid its business processes.
Once again, it is worth noting that both the digital twin and virtual reality tools are digital transformation tools. And with these tools, CKE Holdings Inc. succeeded in developing optimized restaurants with shop floor plans that played to the strength of its employees. The digital twin was also used to test and implement new products at a much faster rate than the traditional processes previously employed by the enterprise.
The end result was a user-friendly kitchen layout that delivered innovation in how CE Holdings restaurants function. The use of augmented reality also added another dimension to the training of new employees. The use of technology ensured new employees learnt through live practical involvement without any of the consequences attached to failure. This also reduced the hours experienced workers spent getting new employees up to speed within the restaurants. Thus highlighting another aspect in which digital transformation can be applied to drive facility efficiency levels.
The Benefits of Digital Transformation to Manufacturing and Production-Based Facilities
The examples outlined already spell out the benefits of digital transformation and its role in enhancing overall equipment and facility effectiveness levels. But, it is only right to compare and highlight what digital transformation brings to the table against the traditional OEE calculations still used within many shop floors.
- A Complete Picture – Unlike OEE calculations which rely solely on manufacturing data produced from equipment and tools, digital transformation technologies can capture every aspect of the production process. This includes capturing data from the diverse algorithms, scheduling details, assets, sub-systems, and events that occur within the shop floor. This makes the level of details provided by digital twin environments superior to analyzing and enhancing facility productivity.
- Improved Customer Strategy – Digital transformation enables the capture of data highlighting customer satisfaction with end products. This information can also be integrated into the manufacturing circle to ensure customers get nothing but the best service. This means with digital transformation the feedback of customers and employees can be used to enhance production facility processes.
- Improved Employee Retention Strategy – The manufacturing industry is notorious for its high employee turnover rate due to diverse factors that make it unattractive to the new generation of workers. The integration of digital transformation can enhance workplace layout, as well as, bring a more modern and captivating process to manufacturing. These enhancements can reduce the turnover rate and get the younger generation interested in manufacturing.
- Enabling Innovation – The increased adoption rate of industry 4.0 business concepts and models in manufacturing means businesses must adapt if they intend to retain their competitive edges. Digital transformation offers a pathway to innovating legacy business process and increasing an enterprise’s ability to stay competitive in a changing manufacturing industry.
The Next Steps
The advantages digital transformation brings to enhancing facility efficiency comes with a butterfly effect that affects leadership, innovation, and problem-solving activities. Although the integration process involves technical knowledge of applying digital twin technologies and simulation software, these skills can be acquired with a little effort.
Simio Fundamentals Course offer businesses and other organizations with the opportunity to train staffs about digital transformation and its specific techniques. You can also choose to register employees to participate in the upcoming Simio Sync Digital Transformation 2020 Conference to learn more about digitally transforming your business processes and how to reap the rewards.